In most cases, every consumer is obliged to pay an account, but there are specific situations when it’s legally acceptable for a consumer to refuse to pay it.
Check if your account is valid
The first situation when you can legally refuse to pay an account is the situation when the account is not valid. For example, a consumer can be summoned to pay for an account, but in these cases, a consumer is recommended to check the validity of an account and, in case if it’s invalid, refuse to pay for it.
The importance of the NCA
Such an option presents one of the biggest defence options in South African law. The National Credit Amendment Act updated the National Credit Act to prohibit the collection of prescribed accounts, thus creating the basis for better consumer protection. Before the citizens had this amendment inserted into the National Credit Act, a creditor could collect on a prescribed account.
So, if you didn’t know the defence of prescription and you started making payments, you were deemed to have interrupted prescription and you were liable. The reason for your liability was not the prohibition of collecting the prescribed accounts.
This is because if you start paying as the layperson, you don’t know if your account is prescribed. Mostly, you won’t even hear of the prescription, until you come to learn later that you shouldn’t have paid the account because it had prescribed.
It’s unlawful for the creditors to collect money upon the prescribed accounts
A consumer who doesn’t know about the prescription of the account has a good basis for constituting the defence. Some consumers with major credits started paying a prescribed account until they realised that the account was prescribed, thus creating a defence based upon that fact.
This situation comes as another in which a particular consumer is allowed to legally refuse to pay an account. Also, the creditors are likely to refund to the consumer the payments they’ve made because it’s now unlawful to collect the money upon it. Such a prohibition was institutionalised by the Prescription Act.
Consumer defence options
The prohibition of collecting the money upon the prescribed accounts is now codified within the National Credit Act. So, this means that a credit provider is strictly forbidden to collect this sort of funds. Some of the major banks were refunding consumers the money they collected on a prescribed account or a consumer paid. Moreover, you will be usually given a letter to say that a certain account or debt is extinguished by the defence of prescription.
This way of defending the consumers certainly comes out as the biggest and most important type of defence available. Also, this consumer defence serves as the strongest argument for a particular consumer in case of legally refusing to pay an account.
In case you are over-indebted, it’s not recommended to avoid paying an account as it can get you imprisoned. In such a situation it’s best that you see if you can apply for a debt review, or see if the sequestration is an option.
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